Reference no: EM131320432
IS= IF A INDIVIUDAL IS SICK, IH=IF a indiviudal is Healthy, E is expected Why is the zero profit line for frail policyholders below the zero profit line for robust policyholders?
a. because frail patients will require more care, they have to be charged higher premiums (r) for zero profit to be reached. This will cause point E (a given value of IS and IH) to move up to the right
b. because frail patients will require more care, they have to be charged higher premiums (r) for zero profit to be reached. This will cause point E (a given value of IS and IH) to move up to the left
c. because frail patients will require more care, they have to be charged higher premiums (r) for zero profit to be reached. This will cause point E (a given value of IS and IH) to move down to the right
d. because frail patients will require more care, they have to be charged higher premiums (r) for zero profit to be reached. This will cause point E (a given value of IS and IH) to move down to the left
e. because frail patients will require more care, they have to be charged lower premiums (r) for zero profit to be reached. This will cause point E (a given value of IS and IH) to move down to the left.
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: IS= IF A INDIVIUDAL IS SICK, IH=IF a indiviudal is Healthy, E is expected Why is the zero profit line for frail policyholders below the zero profit line for robust policyholders?
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